IRD gets tough against firms not paying taxes

KATHMANDU, JAN 24 -

The Inland Revenue Department (IRD) has suspended bank accounts, businesses and fixed assets of more than 100 firms for not paying taxes as part of its crackdown on tax delinquency.

The IRD started its recovery drive on Jan 15 after outstanding tax dues began piling up for a long time and reached more than Rs 24 billion. According to the IRD, outstanding income tax and excise duty amount to Rs 20 billion and the rest consists of VAT and TDS (tax deduction at source).

The IRD said it seized fixed assets including land and buildings of 20 firms. “As these firms owe around Rs 130 million in VAT and income tax, we seized their properties,” said Tulasi Sedai, director at the IRD. Some of the firms whose assets have been confiscated are Ashok Textile and its subsidiaries Nepal Business Company, Mayur Biscuit and Food Industry, and Biratnagar Jute Mills.

Sedai said that these firms had tax dues going back three years. “If they continue to refuse to pay taxes, we will auction off their properties.”

The Inland Revenue Office, Area No 1 of Kathmandu has suspended the bank accounts of 10 firms in Kathmandu for not paying income tax and VAT.

The department has also suspended the bank accounts of two firms listed at the Big Taxpayers’ Office (BTO). They owe the government Rs 250 million, according to an IRD official.

“We have given seven days’ notice to eight other firms listed at the BTO to clear their dues,” said the IRD official, “Each of these companies owes the government at least Rs 10 million in VAT.”

IRD Director General Tankamani Sharma added that the department would focus on taxpayers listed at the BTO as Rs 8 billion remains to be collected from them under several headings, including Rs 4 billion in income tax.

The official also said that the Inland Revenue Office, Lalitpur had suspended the bank accounts of six firms as they had not paid Rs 35 million in taxes to the government. The IRO, Lalitpur has written to different government agencies not to pay what they owe to six other firms as they have not paid their taxes.

The Kathmandu Inland Revenue Office, Area No. 3 has frozen the bank accounts of another 17 firms. These firms collectively owe Rs 5 million in income tax and Rs 19 million in VAT.

The Kathmandu Inland Revenue Office 2 has also suspended the bank accounts of seven firms for their outstanding tax payments amounting to Rs 7 million. The Bhaktapur IRO has directed 20 firms to clear their liabilities within a week, warning them that it would suspend their bank accounts if they continue to defy its directions. All of them have tax liabilities worth more than Rs 10 million each. According to Sedai, a firm paid Rs 64 million in back taxes after the Bhaktapur IRO suspended its bank accounts.

Sharma said that until the delinquent firms clear their tax dues, the penalty charged against them will be continued. “We showed patience for many years, but it won’t happen now,” added Sharma. IRD officials said that since the start of the campaign, some 20 firms which had been delaying clearing their taxes paid up this week.

According to IRD officials, firms in Kathmandu, Chitwan, Hetauda, Biratnagar, Simara and Pokhara, among others, have been punished during the tax recovery campaign.

Sharma said that there were more than 1,000 taxpayers who owe in excess of Rs 1 million each in income tax and excise duty. The number of taxpayers who have not paid TDS and VAT is greater, according to Sharma.